The growth in bitcoin and other ICOs last prompted regulators and bankers across the world last year to take a closer look at the sector. But a drop in the value of crypto assets over the last year as investors lose interest, as well as a plunge in bitcoin, that fell as much as 10% on Tuesday to below $4,500, has taken the pressure to issue stringent new rules.
Britain’s regulators, as well as government officials, told a conference that they were centered on how 2,000 or more crypto assets slot into the current rules and regulations before considering the reforms.
The deputy director for financial services at British financial ministry, Gillian Dorner, told a City & Financial conference, “We want to take the time to look at that in a bit more depth and make sure we take a proportionate approach.”
Britain confronts the challenge of balancing an economy by maintaining stable markets, consumer protection, and thwarting financing crime.
The executive director of strategy and competition at the Financial Conduct Authority, Christopher Woolard, said, “There is a need to clarify “grey edges” around the existing regulatory perimeter. Also, the FCA will consult by the end of this year on where the perimeter lies for crypto assets.”
“This will help clarify which crypto assets fall within the FCA’s existing regulatory perimeter and those crypto assets that fall outside.”
Then, the finance ministry would consult on whether or not the perimeter itself needed shifting.
FCA and Bank of England, a task force of the finance ministry last month suggested a ban on sale to retail customers of derivative products which are linked to crypto assets.
But Woolard said, “Unilateral action by just one country had its limits, and the FCA will seek to work collaboratively with international counterparts.”
The global regulatory bodies have not been able to reach a consensus so far on rule changes and have rather chose to monitor the sector more closely.